Top Four Mortgage Trends of 2021

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Running your own business in the mortgage sector could be a viable and exciting career path for you. Though many industries have been impacted negatively by the pandemic, the mortgage sector has managed to come out of the other side and return to a place of growth. Here are the top four mortgage trends of 2021.


For mortgage and finance brokers, the past year has been up and down. Like most sectors, COVID-19 came with many different unexpected demands to meet and operational changes to make. But with those changes made and restrictions lifting across the UK, the industry is finally in a good place. Why not get involved?

What do businesses in the mortgage sector do?

A mortgage franchise is a business which operates in the thriving mortgage sector. In December 2020 alone, 75,278 houses were purchased in England and Wales [Statista], and net borrowing in the sector during March 2021 was £11.8 billion [Bank of England]. Becoming a part of this lucrative industry makes financial sense, and there are some great investment opportunities out there, including:

  • Your Mortgage Plus - With Your Mortgage Plus, franchisees can become mortgage, finance and protection specialists. 

  • Northwood - Northwood is a network of estate agents and letting agents, and with the company, franchisees could enjoy a successful career in residential property sales.

  • Brokerplan - One of the UK’s most trusted finance brokers, Brokerplan provides core financial services to businesses across the UK, including commercial mortgages, and as a franchisee, you would become part of this growing brokerage.

The shape of the UK mortgage industry post-COVID

Over the last few months, the mortgage industry has been steadily recovering from impacts felt during the worst of the pandemic. House prices were on the increase again by late 2020, with a 7.6% increase seen in November, and the average cost of a home sitting at £267,000 [Office for National Statistics].

In spring 2020, there was a massive decline in mortgage applications after the country was placed in lockdown, but now the real estate industry is preparing well for its post-COVID comeback.



The top four mortgage sector trends in 2021

1. Increased accessibility to first-time buyers

A few months ago, the government announced a mortgage guarantee scheme as part of the 2021 budget. This scheme provides support to banks, enabling them to offer new 91-95% Loan To Value (LTV) mortgages, and helping first-time buyers to get onto the coveted property ladder.

Similarly to a Help to Buy mortgage, new home buyers shouldn’t see a practical difference in the process when it comes to taking out a 95% mortgage. The differences will be felt by banks, as the government will be underwriting 95% mortgage loans, giving lenders the secure knowledge that they have somewhere to turn if a borrower is unable to make their monthly mortgage repayments. Many major lenders have agreed to participate in this guarantee scheme, including HSBC, Natwest, Barclays and Santander.

The launch of various 95% options for borrowers is hugely positive and will help many people who could otherwise not have been able to get on to the housing ladder.
—Mark Harris, SPF Private Clients

2. Low mortgage rates

The Bank of England looks unlikely to increase the base rate from its current low level, at least for the next few months. The Bank of England is responsible for influencing mortgage interest rates across the UK, and when the base rate decreases, mortgage rates will decrease with it. For buyers, this is great news, as borrowing is cheaper and monthly payments become more manageable.

Responding to the COVID-19 crisis, the Bank of England (BoE) has made two rate cuts in quick succession, first to 0.25 per cent just before the Budget, and now to 0.1 per cent. And although this is bad news for savers, it could save a lot of money for first-time buyers, remortgagers, and anyone whose mortgage tracks the BoE base rate.
—Unbiased 


>> Read more about: Small Business Insurance


3. People taking advantage of the continued stamp duty holiday

Stamp Duty Land Tax, or SDLT, must be paid if you purchase property or land over a certain price point in the UK. Last year, in response to pandemic-induced struggles, the government announced a stamp duty holiday, during which home buyers wouldn’t have to pay any stamp duty on purchases under £500,000. 

Originally put in place until March 31st 2021, the stamp duty holiday has now been extended to June 30th, and buyers continue to take advantage of the savings. And until September buyers will only be required to pay stamp duty on a home over £250,000.

4. People re-considering living arrangements and housing requirements

For many, the pandemic has been an opportunity for reflection and re-assessment. People have been looking at their lives and evaluating what truly makes them happy. What actually sparks joy. After many months spent indoors without a garden, a lot of city dwellers are heading out into the country, with a new appreciation for the luxury of outdoor space. 

In a recent survey, in fact, it was revealed that one in seven Londoners wants to leave the city as a result of the pandemic, and when asked the likelihood of them doing so within the next 12 months, 30% replied that they definitely would be [London Assembly Housing Committee].

The pandemic has made a lot of people re-evaluate their living situation and what they see as a priority. [...] These survey results tell us that gardens and parks are a major priority for people when they are considering where they live.
—Murad Quershi, London Assembly Housing Committee

Invest in a mortgage franchise today

Now that you’re armed with a clearer picture of the top four mortgage trends right now, you should have a better idea of whether franchising in the mortgage sector would be a good move for you. If you’d like to start a profitable and varied career with a brokerage, consider investing in a mortgage franchise today.

If you’re interested in franchising, but you’d like to explore opportunities in other sectors, check out Point Franchise’s UK franchise directory to browse your available options.

>> Read more articles on the Mortgage sector

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